As Peter Suderman notes, there’s
a new deal about the federal budget that’s been hammered out by
Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.). It needs
to be passed by the House and the Senate, which may present some
difficulties. The deal is supposed to save the country from the
dread threat of “sequestration,” or a series of automatic,
generally across-the-board cuts imposed by the last budget deal,
passed in the summer of 2011.
The short version of
the deal, which covers discretionary spending over the next two
years? The feds will spend $45 billion more in 2014 than they would
absent a deal and another $20 billion more in 2015. Various “fees”
(not taxes, never taxes!) will go up too, allowing Ryan and Murray
to tout this as a plan
to save “$28 billion over ten years by requiring the
President to sequesterthe same percentage of mandatory budgetary
resources in 2022 and 2023 as will besequestered in 2021 under
current law.”
Thus the following table, which shows increases in spending from
current law:
Whew, that was a close call, wasn’t it? The truly miniscule
trims to mandatory spending are unaffected, meaning that all the
problems with major entitlement programs still exist and will only
get worse. But the important thing is that we’ve avoided the “dumb”
cuts imposed by sequestration that would have truly devastated
discretionary spending, right?
Here’s a chart by Reason columnist and Mercatus Center
economist Veronique de Rugy that reminds us just how draconian the
cuts imposed by sequestration really were:
She’s updated the chart to make projections through 2023. The
growth rate of spending, based on Congressional Budget Office (CBO)
figures, shows that the sequester wasn’t a big deal at all.
That’s true even when you focus just on the base defense budget,
which is the issue that arguably pulled the GOP to the table in the
first place. The effects are larger on defense spending but, hey,
the defense budget has been on steroids for most of the 21st centuy
due to long and not-quite-over wars in Afghanistan and Iraq, plus a
neverending war on terror. If past was prologue, defense spending
would drop much more significantly as we at least announce the
official end of our efforts overseas. Not quite the case:
There’s a real question as to whether this Ryan-Murray deal will
get the votes needed to pass in Congress. But as a rough
approximation of what the two major parties want out of a deal, it
underscores that spending only goes down by accident. Remember that
President Obama put sequestration into play precisely as a trigger
to make sure that a bipartisan deal to spend more money would get
done.
Real federal spending has indeed flattened over the past few
years, partly because of the sort of gridlock that led to
sequestration and partly because it had been jacked up for so long
and then with a giant burst at the very end of the Bush presidency
and the start of the Obama years. Here’s a bonus chart, also
courtesy of de Rugy, that shows the general trend over the past
several decades:
If you care about shrinking the size, scope, and spending of
government – and you should if you care about “Free Minds and Free
Markets” both – there’s not a lot of reason to cheer this latest
deal and, even more sadly, what might replace it.
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from Hit & Run http://reason.com/blog/2013/12/11/just-little-the-budget-deal-matters-in-t
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